Chidambaram’s Charms, Not Modi Magic, Moving Markets

Finance Minister P. Chidambaram claimed credit for the recent rallies in India’s stock market and rupee, dismissing suggestions that what some have called “Modi magic” is moving the markets higher.

While many investors say the rupee has strengthened and the Indian stock market has touched new highs on optimism a new business-friendly government is about to come to power–led by Narendra Modi, the prime ministerial candidate of the Bharatiya Janata Party—Mr. Chidambaram disagrees.

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It was his party’s policies that have triggered the optimism, he told his constituents in the southern state of Tamil Nadu Tuesday.

“I am amused to read in some sections of the media that it’s the hope of a stable government that is bringing in investments and driving up the capital market and the value of the rupee,” Mr. Chidambaram told people in Sivaganga–the constituency he represents in parliament.

Some investors say they welcome Mr. Modi as prime minister as his track record as the chief minister of the state of Gujarat suggests he would be better at getting things done than the current administration.

While critics say Mr. Modi’s accomplishments have been exaggerated by his supporters, few deny that India’s economy has fallen on tough times. With growth slowing to a decade low and inflation at uncomfortably high levels, many voters are looking for a change.

Despite the naysayers, Mr. Chidambaram tried to tout the government’s accomplishments on Tuesday. He pointed out that under his party’s leadership, India has allowed greater foreign investments in sectors such as retail, civil aviation and telecom and set up a ministerial panel to speed up large industrial and infrastructure projects. The government has also managed to rein in India’s current account deficit, which had pushed the rupee to a record low last fall.

“If there is any hope that is driving the market, I believe it is the hope that the new government will follow,” through on the economic plans that the current government set a long time ago, he said.

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